According to StreetInsider, MIC Coalition member Pandora has returned to Planet Earth and closed licenses with ASCAP and BMI, ending years of rate court litigation by the highly litigious Pandora under the controversial Department of Justice consent decrees.
Pandora (NYSE: P) and ASCAP and BMI, the world’s leading Performance Rights Organizations (PROs), today announced the signing of two separate multi-year licensing agreements for their combined catalogs of more than 20 million musical works. These deals create business benefits for Pandora, while modernizing compensation in the U.S. for ASCAP and BMI songwriters and publishers. In connection with the signing of the BMI agreement, Pandora has agreed to withdraw its appeal of the May 2015 order in the recent BMI rate case.
ASCAP’s and BMI’s leaders respectively emphasized the importance of preserving the value of music and the archaic and costly government rate court process that both PROs are subject to.
ASCAP’s CEO Beth Matthews nailed the value proposition:
“This agreement is good news for music fans and music creators, who are the heart and soul of ASCAP, and a sign of progress in our ongoing push for improved streaming payments for songwriters, composers and music publishers that reflect the immense value of our members’ creative contributions.”
BMI’s CEO Mike O’Neill captured the weaponized consent decrees that Pandora and other MIC Coalition members use to lay siege to songwriter’s pocketbooks:
“Not only is our new agreement comparable to the other direct deals in the marketplace, but it also allows us to amicably conclude our lengthy rate court litigation and focus on what drives each of our businesses – the music.”
Good news for Pandora stockholders, too–maybe Pandora’s “Selling, General and Administrative” Income Statement line will start going down instead of tripling and net profits will start going up. (Pandora’s rate court costs go into the “Professional Services” category in the SG&A.) Remember–Pandora’s 2014 gross profit was up 300% year over year, administrative costs were up by 250%–no wonder Pandora can’t make a profit.)